Administrative intervention in businesses distorts the market
On the morning of November 23, the National Assembly discussed in groups the draft Law on Management and Investment of State Capital in Enterprises (amended).
Speaking about the state enterprise management model, Prime Minister Pham Minh Chinh emphasized that business activities must follow market rules, the rules of value, supply and demand and competition; and cannot be intervened with administrative measures.
“If we intervene with administrative measures, it will lead to market distortion and enterprises are not administrative agencies to intervene. That is not in line with development thinking,” said the Prime Minister.
Regarding the business plan, the Prime Minister suggested that the Board of Directors (BOD) should be responsible for decisions to preserve and develop capital.
“The naming of the model has been based on management, so it is heavily management-oriented. When management is not possible, administrative measures are used, which is not in accordance with market rules,” the Prime Minister said, adding that it is necessary to clarify legal regulations so that the Board of Directors can be creative, determined and fearless.
“The business plan and operations of an enterprise must be decided by the Board of Directors. The Board of Directors was created to make decisions, why do we have to ask another administrative level?... Asking for opinions in a roundabout way, one agency disagrees and we have to ask again,” the Prime Minister questioned.
The head of the Government emphasized that this law must be clearly regulated so that businesses can act boldly, not be afraid of making mistakes, and most importantly, so that they can make timely and appropriate decisions.
Time is money, why keep struggling?
To clarify, the Prime Minister pointed out that time, intelligence and the ability to make timely decisions are the decisive factors for success in an event or problem.
“Time is money. Wasting time is wasting money… Why let a problem linger on without being resolved?”, the Prime Minister said and asked for boldness, if the decision is wrong, then take responsibility.
Citing the case of Vietnam Airlines, the Prime Minister said that the national airline has been facing difficulties due to the impact of the COVID-19 pandemic, but since then it has been struggling to ask for capital from everywhere. Why not give Vietnam Airlines or an agency the authority to decide on capital increase, instead of having to run around in an administrative manner?
In summary, the Prime Minister emphasized the need for strong decentralization of management, clearly defining what is allowed and what is not, to create space for creativity.
Regarding enterprise evaluation, the Prime Minister agreed with the viewpoint of delegate Nguyen Manh Hung (Can Tho Delegation), Standing Member of the Economic Committee, that it is necessary to evaluate enterprises as a whole, not evaluate each specific incident.
The Prime Minister analyzed the reality that private enterprises work together very quickly, without bidding, but do it very correctly. Meanwhile, state-owned enterprises have to bid back and forth, and in the end, there are still "blue and red teams", leading to many cases of officials being disciplined continuously. This is an issue that needs to be learned from.
The Head of Government also emphasized that when the situation changes, measures must change, organizations, processes and rules must change.
Regarding the way to evaluate enterprises, according to the Prime Minister, the law needs to regulate the overall evaluation of the value that an enterprise brings in a year or a whole term, not evaluating each job to have a standard view because business is not a one-day or two-day affair and there are gains and losses.
Commenting on the transitional provisions in the law, the Prime Minister said that when changing the law, there should be transitional conditions so that issues being handled under old regulations have conditions to be implemented, leaving no legal gaps.
